Chapter 5, Problem 5.3EX

Chart of accounts

Monet Paints Co. is a newly organized business with a list of accounts arranged in alphabetical order, as follows:

Accounts Payable	Inventory
Accounts Receivable	Land
Accumulated Depreciation—Office Equipment	Miscellaneous Administrative Expense
Accumulated Depreciation—Store Equipment	Miscellaneous Selling Expense
Advertising Expense	Notes Payable
Cash	Office Equipment
Common Stock	Office Salaries Expense
Cost of Goods Sold	Office Supplies
Customer Refunds Payable	Office Supplies Expense
Delivery Expense	Prepaid Insurance
Depreciation Expense—Office Equipment	Rent Expense
Depreciation Expense—Store Equipment	Retained Earnings
Dividends	Salaries Payable
Estimated Returns Inventory	Sales
Income Summary	Sales Salaries Expense
Insurance Expense	Store Equipment
Interest Expense	Store Supplies
Interest Revenue	Store Supplies Expense

Construct a chart of accounts, assigning account numbers and arranging the accounts in balance sheet and income statement order, as illustrated in Exhibit 10. Each account number is three digits: the first digit is to indícate the major classification (1 for assets, and so on); the second digit is to indícate the subclassification (11 for current assets, and so on); and the third digit is to identify the specific account (110 for Cash, 112 for Accounts Receivable, 114 for Inventory, 115 for Estimated Returns Inventory, and so on).